Microsoft Corporation Presents at Credit Suisse 18th Annual Technology Conference, Dec-04-2014 12:00 PM - NasdaqGS:MSFT

NasdaqGS:MSFT

"B. Turner," the Chief Operating Officer of Microsoft, presented the following information during the Credit Suisse 18th Annual Technology Conference:

• Transformation Overview: Turner discussed Microsoft's transformation into a productivity and platform company in a mobile-first and cloud-first world. He highlighted the company's shift from its traditional business model, centered around the Windows client operating system and the PC operating system, to a model focused on being a cloud OS, devices operating system, and provider of first-party hardware.

• Business Model Transition: Turner explained that Microsoft's original business model relied on attaching its software to as many sockets as possible and charging upfront, regardless of whether the software was used. The company is transitioning from this model to one that emphasizes cloud services and subscriptions.

• Future Focus: Microsoft's future is geared towards becoming a cloud OS and devices operating system, providing first-party hardware, and enabling dual users (both personal and professional) to have seamless digital work and digital life experiences.

• Reinventing Productivity: Turner emphasized Microsoft's aim to reinvent productivity by providing tools that enable individuals and organizations to achieve more. This includes developing cross-platform solutions for mobile devices, integrating social capabilities, leveraging intelligent systems powered by machine learning, and creating natural user interfaces.

• Organizational Changes: Turner mentioned significant changes within Microsoft, including the integration of Nokia and the streamlining of the engineering organization to increase speed and agility. Microsoft now has unified groups for operating systems, cloud, applications, hardware and devices, and marketing.

• First-Party Hardware: Turner highlighted the Surface Pro 3 as an example of Microsoft's commitment to first-party hardware, aiming to lead the innovation curve and push OEMs to innovate faster.

• Third-Party Partnerships: Microsoft has formed strategic partnerships with companies like Salesforce, IBM, Dropbox, Oracle, and Cisco. These partnerships involve both cooperation and competition (coopetition), with Microsoft competing in certain areas while supporting third-party products and services on its platforms.

• New Business Models: Turner discussed Microsoft's introduction of zero royalties on devices with screens smaller than 9 inches, leading to increased design wins and innovation in the marketplace.

• Cross-Platform Support: Microsoft is extending support for its products, like Office and .NET, to iOS and Android.

• Cloud Investments: Turner noted Microsoft's significant investments in cloud infrastructure, boasting 19 regional data centers worldwide, which is six times more than one competitor and twice as many as another.

• Hyper-V Growth: Turner mentioned the growth of Microsoft's Hyper-V virtualization product, noting that it is gaining market share at the expense of its main competitor due to its superior technology and lower pricing.

• Data Protection and Privacy: Turner highlighted Microsoft's commitment to data protection and privacy, stating that the company does not snoop on emails or sell customer data.

• Windows 10: Turner provided an update on Windows 10, emphasizing its unique features, such as a single kernel across all devices, a unified platform for drivers and apps, and a single store. He also mentioned the technical preview for enterprise customers and the plan to release the OS by late summer or early fall the following year.

• Momentum Building: Turner concluded by stating that Microsoft's momentum is building across the cloud and key devices, and the company is reinvigorated with energy and enthusiasm around productivity and platform in a mobile-first and cloud-first world.